Assign Unattributed Tips

[frozenart]

How do I assign these unattributed tips so the payroll system recognizes that they have been attributed to an employee? Where are these unattributed tips? Do they get deposited to the business account?

[TheRealChipA · Accepted solution]

Hey @frozenart

1. Yes, they get deposited into your account as usual.
2. The only way to assign them to an employee is to manually edit the tip field when you run your Square Payroll for the period.  Hence the message in the screen shot you posted “may need to be manually added by you into your team members’ paychecks.”
3. If you don’t use Square Payroll, you would have to manually update whatever you are sending to your payroll provider.
4. Lastly, since they are deposited to your account, if you choose not to redistribute them to employees, then you’ll need to report them to the IRS as other income for tax purposes.  You’ll need to get advice from your accountant/tax professional if you choose to go this route.

I hope that helps.

[TheRealChipA · Accepted solution]

Hey @frozenart

1. Yes, they get deposited into your account as usual.
2. The only way to assign them to an employee is to manually edit the tip field when you run your Square Payroll for the period.  Hence the message in the screen shot you posted “may need to be manually added by you into your team members’ paychecks.”
3. If you don’t use Square Payroll, you would have to manually update whatever you are sending to your payroll provider.
4. Lastly, since they are deposited to your account, if you choose not to redistribute them to employees, then you’ll need to report them to the IRS as other income for tax purposes.  You’ll need to get advice from your accountant/tax professional if you choose to go this route.

I hope that helps.

[frozenart]

Thanks for the answer. I do use Square Payroll.

Then once I add that amount manually to the tip field, the message will disappear on the next round of payroll?

[TheRealChipA · Accepted solution]

@frozenart Yes, it will.  Having said that, if you go back and look at the history of a period with unattributed tips, they will still show unattributed there. That message does NOT look at adjustments made during a payroll run.  It is only alerting you to the fact that transactions were closed for which Square was unable (at the time) to figure out who should get the tips.

If you need to have a check for yourself, set up a tip clearing account in your accounting system.  Each day you would add tips received into it, and when recording payroll you would deduct tips paid out.  After each payroll is posted, this clearing account should always equal zero.  That helps you be sure that you are redistributing all tips received as you should.